Two things.
First, the market is bullish on the news that the House Republicans are beginning to cave and want language inserted into the bill where Paulson would "consider" their options.
The market is bullish because the investment banks know that toxic debt can be taken off of their books and put onto the backs of the taxpayers.
Secondly, the credit lending facilities tightened even further and illiquidity is rampant.
After this bill passes, we will see 3 to 5 days of market euphoria. The Dow will shoot up and all will be right with the world.
The following week, you will begin to see the credit markets tighten again, when they finally come to the realization that the Congressional bill didn't solve anything having to do with the real problem.
One more thing - the $700 billion (or whatever size 'bucket' they agree on) is simplay a "pipe". Paulson will use it to launder trillions and trillions of bad debt, by dividing each $700 billion into $50 billion dollar tranches and selling them to the bond market as 'Aaa' paper.
I bet if the bill is a no show by next Friday, the world still won’t end. In fact if it turns out that it won’t be a giant sh** sandwich for the taxpayer, ie no handout, it still won’t end.
I for one, am getting damn tired of the ‘stampede mentality’ of the Marxists. Just a little more socialism, and all will be fine.